Italy’s privatisation of bailed-out lender Banca Monte dei Paschi di Siena (BMPS.MI) may finally be on the right track. The Treasury sold about 315 million shares, equivalent to a 25% stake, at 2.92 euros apiece on Monday, cashing in 920 million euros and cutting its holding to 39%. The sale price was nearly 50% higher than last year’s high-stakes 2.5 billion euro capital increase, which cost taxpayers 1.6 billion euros.
Rome took advantage of a near-30% rally in Monte Paschi’s shares during the month leading up to the sale. The price surge was prompted by higher interest rates, an improved business outlook and receding legal claims that historically weighed on the stock. And the reasonable sale discount of 4.9% to the most recent market price showed that private investors were keen to buy shares in what has been long considered one of Italy’s most vexing corporate lemons. Granted, Rome will never recoup the around 5.4 billion euros it burnt to save Monte Paschi in 2017. But while rates stay high, selling down more shares looks like a better outcome for taxpayers than submitting to the onerous sale conditions UniCredit(CRDI.MI) CEO Andrea Orcel tried to bargain for in 2021. Two years ago, interest rates were low and Monte Paschi's recovery seemed a distant prospect. Yet now, the decision not to go ahead with the deal has turned out to be smart. (By Lisa Jucca)
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